QUESTION TWo.Suppose the Daily Graphic Newspaper estimates that if it raises the price of its newspaper fromGhc1.00 to Ghc1.50 then the number of subscribers will fall from 50,000 to 40,000.a. What is the price elasticity of demand for the Daily Newspaper when elasticity iscalculated using the midpoint method?b. What is the advantage of using the midpoint method?c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise theprice of a newspaper from Ghc1.00 to Ghc1.50? Why or why not?d. Suppose there is an increase in consumers' incomes. In the market for automobiles(a normal good), does this event cause an increase in demand or an increase in quantitydemanded? Does this cause an increase in supply or an increase in quantity supplied?(Explain. NB: Explanation must not be more than half a page.)e. Suppose there is an advance in the technology employed to produce automobiles. Inthe market for automobiles, does this event cause an increase in supply or an increasein the quantity supplied? Does this cause an increase in demand or an increase in thequantity demanded? Explain NB: Explanation must not be more than half a page.f. The demand and supply functions for two related commodities A and B in two differentmarkets are defined below:Qda= 410-5PA-2PsQdu= 295-Pa-3PaQSa= -60+3PAQse= -120+2Psi. Find the equilibrium conditions in the two marketsii. How are goods A and B related? Explain your answer.Page 2 of 2 QUESTION TWo.Suppose the Daily Graphic Newspaper estimates that if it raises the price of its newspaper fromGhc1.00 to Ghc1.50 then the number of subscribers will fall from 50,000 to 40,000.a. What is the price elasticity of demand for the Daily Newspaper when elasticity iscalculated using the midpoint method?b. What is the advantage of using the midpoint method?c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise theprice of a newspaper from Ghc1.00 to Ghc1.50? Why or why not?d. Suppose there is an increase in consumers' incomes. In the market for automobiles(a normal good), does this event cause an increase in demand or an increase in quantitydemanded? Does this cause an increase in supply or an increase in quantity supplied?(Explain. NB: Explanation must not be more than half a page.)e. Suppose there is an advance in the technology employed to produce automobiles. Inthe market for automobiles, does this event cause an increase in supply or an increasein the quantity supplied? Does this cause an increase in demand or an increase in thequantity demanded? Explain NB: Explanation must not be more than half a page.f. The demand and supply functions for two related commodities A and B in two differentmarkets are defined below:Qda= 410-5PA-2PsQdu= 295-Pa-3PaQSa= -60+3PAQse= -120+2Psi. Find the equilibrium conditions in the two marketsii. How are goods A and B related? Explain your answer.Page 2 of 2

a.Initial Price(P1)= Ghc1.00 New Price(P2)=Ghc1.50 Initial Quantity(Q1)=50,000 subscribers New…

QUESTION TWO. Suppose the Daily Graphic Newspaper estimates that if it raises the price of its newspaper from Ghc1.00 to Ghc1.50 then the number of subscribers will fall from 50,000 to 40,000. a. What is the price elasticity of demand for the Daily Newspaper when elasticity is calculated using the midpoint method? b. What is the advantage of using the midpoint method? c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise the price of a newspaper from Ghc1.00 to Ghc1.50? Why or why not?

QUESTION TWO. Suppose the Daily Graphic Newspaper estimates that if it raises the price of its newspaper from Ghc1.00 to Ghc1.50 then the number of subscribers will fall from 50,000 to 40,000. a. What is the price elasticity of demand for the Daily Newspaper when elasticity is calculated using the midpoint method? b. What is the advantage of using the midpoint method? c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise the price of a newspaper from Ghc1.00 to Ghc1.50? Why or why not?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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